Top 6 Pieces of Advice Before Signing a Gas Lease

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1. Do not be be rushed to sign a lease in a few days. Your grandchildren – no, your great-grandchildren, can be bound by what you sign. The more in a hurry the landman is, the more they are trying to put something over on you.

2. Understand what you are signing. Read the longer article on our web site about leases. Hire a knowledgeable lawyer to explain the lease to you. (You spend hundred of dollars each year for homeowners’ insurance and car insurance. Think of the lawyer’s fee as insurance for years and years for your mineral and other property rights.)

3. There is nothing in law called a “standard” lease. You are accustomed to signing consumer contracts in which the provisions are largely dictated by consumer protection laws that were enacted in response to abuses by merchants. You may not understand the provisions, but you trust they are not too bad. There are NO laws protecting consumer/landowners on what a lease can and cannot say. You can only trust that the company’s lawyer made it as good for the company as possible.

Scratch out what you do not want int eh lease, like storage, secondary recovery, coal bed methane, and giving a “general” warranty”.
Add an addendum with what you want, like protecting some areas from drill pads and roads, setting out the seeds you want replanted, free gas, etc.

4. Join with neighbors to increase bargaining leverage. The more acres you are leasing the more bargaining leverage you have in negotiations. If the landman says that if you do not sign the lease right now, the landman will get a lease from neighbors and drain the gas out from under you without paying, then you should get to the neighbor first. Put together a couple hundred or even a couple thousand acres and negotiate together – and share lawyer expenses. (We do not recommend signing rights over to huge, huge bargaining groups. There have been disappointments with many of them.)

5. Shop around. Find other landmen and companies. Talk to neighbors or go to the courthouse record room and see what companies have recorded leases or have people researching oil and gas land titles. Get the companies bidding against each other. Think of what the value of the lease is to the driller is, not just what the value is to you.

6. Join the West Virginia Surface Owners’ Rights Organization. Help support this web site and our advocacy and education.